In this paper we analyse a case of adverse selection in the credit market to show that, in the presence of a monopolistic bank, bad firms can be beneficial to accumulation and growth. Two main implications are drawn: first, even if classical diminishing returns on technology are ruled out, growth declines over time. Second, any attempt to make banks more capable of discriminating between bad and good firms will resolve itself into a restraint to growth.
|Titolo:||Are Bad Firms Beneficial to Growth?|
|Data di pubblicazione:||2012|
|Citazione:||Are Bad Firms Beneficial to Growth? / Caserta, Maurizio; Reito, Francesco. - In: MANCHESTER SCHOOL. - ISSN 1463-6786. - 80:3(2012), pp. 279-294.|
|Appare nelle tipologie:||1.1 Articolo in rivista|